Greece's Borrowing Cost Soars
Source: Agencies |
April 16, 2010, Friday
|
Print Edition
Print Edition
GREECE'S cost of borrowing is soaring again, despite a weekend pledge of financial support from its European partners.
The interest rate gap, or spread, between Greek 10-year government bonds and their German equivalent reached 4.2 percentage points yesterday, up from 3.9 on Wednesday.
Greece won a promised 30 billion euro (US$41 billion) last-resort loan from eurozone nations on Sunday, which briefly lowered its borrowing costs. But financial markets remain skeptical and are demanding high interest to hold Greek debt.
A week ago, the spread hit 4.8 percentage points, the highest since Greece joined the euro. The higher the spread, the lower market confidence in Greece's ability to pay, and the harder it becomes for Athens to cut its budget gap and debt.
The interest rate gap, or spread, between Greek 10-year government bonds and their German equivalent reached 4.2 percentage points yesterday, up from 3.9 on Wednesday.
Greece won a promised 30 billion euro (US$41 billion) last-resort loan from eurozone nations on Sunday, which briefly lowered its borrowing costs. But financial markets remain skeptical and are demanding high interest to hold Greek debt.
A week ago, the spread hit 4.8 percentage points, the highest since Greece joined the euro. The higher the spread, the lower market confidence in Greece's ability to pay, and the harder it becomes for Athens to cut its budget gap and debt.
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